Sunday, October 30, 2016

Louis Vuitton: A Story in Brand Destruction


Rome: The Eternal City

My fiance Jackie and I just got back from a spectacular 2 week wine cruise with Darioush Winery that started in Lisbon and ended in Rome. 

I've never been to Rome so we tagged on an extra 5 days at the end of the cruise to see the sights. 

There is a problem in going that extra week though. I don't care how big your suitcase is. By the time you've lived out of it for 2 weeks you are flat out of clean clothes so selecting something to wear becomes a challenge.

What I underestimated is just how that challenge could impact our shopping experience at one of the world's top luxury retailers. Ask yourself as you read though, 'could this happen at my winery?'

Rome: Luxury Shopping

The Spanish Steps
Having several passengers tell us about the great luxury shopping in Rome, we decided we were going to stop at Louis Vuitton and get a specific backpack Jackie had secretly been eyeing for several months. 

So shortly after we plopped into our hotel, we decided to take our disheveled selves for a walk and have some fun shopping at the Vuitton store near the Spanish Steps. That is where we had the Pretty Woman experience. 

You remember the scene in the movie referenced in the video clip above, where Vivian in her 'street clothes' walked into a Rodeo Drive store and was utterly dismissed by the staff? They didn't want her in the store. That was that store's culture and that was my real-life experience at Louis Vuitton in Rome. 


The Ugly Details:

Louis Vuitton

We entered the LV store and with anticipation, wandered around the first floor but without anyone greeting us or acknowledging our presence. 

It was a little busy so I didn't think too much about it. Undeterred we went upstairs. Maybe everyone was just busy and they were less busy up there? 

Again, despite plenty of sales associates walking around, nobody greeted us and not a single person said 'can I help you?' 

My fiance Jackie is far more intuitive than I in these matters and she was feeling uncomfortable. 'Let's just go' she said. Being more dense, I decided to continue the quest.

Please Leave! 

I was really in a state of denial. While I had only been in a few LV stores in my life, the brand's reputation is hard to ignore and because of that, I had built up expectations of the experience, which is the truth in what a brand should produce. High consumer expectation is a good problem to have!

I thought the poor service had to be an aberration. I decided we should just sit on the couch and wait. That should be an obvious sign we weren't just window shopping, right? But after about 5 minutes of me smiling and staring at every sales associate walking by but still getting zero attention, I decided for some reason we were being given a message: You don't belong here. 

While walking down the stairs toward the exit, with one of the sales associates walking up the other direction we finally had our first personal interaction in our 20 minute stay: 

"Arrivederci," she said with a smile. 

Louis Vuitton: How To Ruin Your Brand

Tomb of Julius Cesar

I actually burst out laughing! I now understood the dismissive reaction of the sales associates. While I don't think we smelled, we didn't look like we could afford to be in the store and just like the movie, we were basically told to leave. Arrivederci trailer trash!! 

It is a little funny in a warped sort of way. My mind raced to the parallel in the scene from Pretty Woman. Our clothes were wrinkled from the cruise length and we were dressed very casually like tourists who were trying to see Rome on $45 a day instead of consumers who were ready to shell out for goods with the LV logo. "I have all this money and no dress!"
I don't know for certain why we had that experience or what specifically is the culture at the store that allows everyone to ignore a guest, but that was our experience so the true reason is irrelevant. Execution is what matters and what I saw first-hand at the store was a crack in the vaunted LVMH armor. 

One of the most valuable luxury brands in the world had totally and completely failed - store wide - at a luxury shopping experience. And make no mistake: For this experience to happen uniformly with all the sales associates responding the same way, I guarantee that this experience is not isolated just to me. This is endemic to that store at a minimum and left unchecked in one of the 4 fashion capitals of the world, that behavior will spread to their other retail stores, and the word will spread with consumers to the ruination of their brand.

But how does that tie into the wine industry? When it comes to luxury goods, when experience is part of the sales equation, tactics and execution are similar so there are lessons the wine business can learn.

Lessons Learned: Rethinking Your Sales Goals

Triumphal Arch, The Forum, Rome
Being located next to the Spanish Steps; a major tourist attraction, that location has to drag in all varieties of people. I'm certain they get their share of pure window shoppers and even an occasional over-served individual with a $300 secured credit card asking about a $5,000 item. 

We get those types in the wine business too. I understand how those people can absorb time and result in no commission and no wine sold. But for the sake of the brand is that the right sales behavior to foster?

Questions: How are you setting sales goals in your tasting room? Do your goals lead to effective interactions that drive positive brand equity, or are they purely about revenue? Is it possible a goal is overemphasized creating a circumstance that could lead to our experience? How are you measuring the effectiveness of your sales culture? Are you engaged and observing the activities in your tasting room for qualitative measures? Is your sales culture delivering your brand's future promise?

Lessons Learned: Are You Profiling Your Guests?

The Trevi Fountain
Does profiling such as I experienced at Louis Vuitton take place at wineries? Absolutely it does, but hopefully not with "please leave" as a possible outcome. 

Today, we have many wineries who are trying to dial in their DtC practices. To improve tasting room sales in heavily frequented locations or tourist spots, wineries often have someone at the door as a greeter who can ask a few questions and then direct that person to the VIP Lounge, or the general tasting bar depending on their responses. 

Profiling in that way can have positive results in giving the guest the experience they seek, but it's a very high-risk task. That important position can't be staffed by the equivalent of a restaurant hostess. Greeting someone is a minimum job requirement in a hospitable winery.

Questions: Does your winery value hospitality as an embedded imperative? Do you insist that everyone from cellar worker to CEO look guests in the eye and greet them when passing? Do you have someone who's job is to direct guests to positions within the tasting room? Is that a highly paid job or entry level? What is the first impression a consumer gets when they enter your place of business?

Lessons Learned: It's Not Just About What's in the Bottle

St Peter's Basilica
A recent report by consumer research firm L2 had the following comment: 

"Affluent consumers take customer service extremely seriously, which can make it or break it for luxury brands.  These high-priced retailers can miss out if customers feel that the shopping experience is not up to the highest standards, no matter the quality of the product."

Like a Vuitton bag, fine wine is a luxury product. Quality of product is critical so we spend a lot of time thinking about the label, the story, the grapes and farming in order to make and present the best possible wine for the price point. But as a luxury good, the quality of the product is only the permission to play. After that, every experience your employees have with your guests either builds or detracts from your brand. 

Questions: Have you hired a secret shopper to test how your guest interacts with your brand? Do you analyze all points of interaction such as social, direct contacts, desktop, phone, and smart phone communication? Each of those are defining the shopping and engagement experience and your brand. Do you monitor the digital brand that is being created with Yelp, Wine Searcher, and the volume of wine apps out there?


The End of the Pretty Woman Experience

Being a persistent sort, after getting dismissed at the Via Condotti Louis Vuitton store, Jackie and I decided to walk to the other LV store at the Piazza di S. Lorenzoin but we just couldn't walk in. We both were actually taken aback by what we had just experienced and the whole idea of having fun shopping lost it's luster. So, we instead walked over to a cafe to take a break over an early dinner and a bottle of wine. 

Pretty Woman Gets Respect

By the end of dinner, with our strength restored and with the wine giving us new-found courage, we walked into the other LV store where we immediately faced four sweater-clad sales associates talking to each other. One of them looked at us and said, 'buongiorno' with a smile, and then resumed talking with her associates. 

There was hope, but we still didn't have their attention.

I kept staring at her as we walked closer, and while continuing her conversation with her colleagues, our eyes connected and she said, "Do you need help?" I blurted out, "Help her!" pointing at Jackie. 

I felt a little like Richard Gere at that point in the movie and the plaintive plea sounded funny coming out my lips. It was laced with irritation, expectation, and bolstered with the fortification of the bottle of Montepulciano we'd just consumed.

The associate walked behind the counter and after a slow start showing her some wares, started to warm Jackie up. I just took a seat on the couch as I was out of my element, but I was interested to see what Jackie was going to do? I started feeling better when I could see both the sales associate and her laughing, so I started sneaking pictures of the process like this one because I wanted to share this experience and story with you.

The Final Bill

It turned out we bought 4 different items at the second Louis Vuitton store and did predictable financial damage that I'm coming to grips with now that I've seen the credit card statements at home.

We knew when we started out that day that we were going to spend a painful amount of money on a product and like DtC in wine sales, both of us had an expectation that included being treated to a fun experience as part of the process. Experience is part of what you pay for when buying luxury.

Finally just for fun, like the scene from Pretty Woman above, we both walked back into the first Vuitton store near the Spanish Steps with our shopping bags in hand, full of merchandise. We forcefully grabbed the attention of the sales clerks and said to them, "You work on commission don't you? Big mistake. Huge!" 

Well .... we didn't do that, but it would have made an great end to the story! Wouldn't it??


Could this experience happen at your winery? That's the important question.


Weigh in with Your Thoughts and Opinions!!

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  1. I'm European, have lived in the US for 25 years. Your experience is not uncommon in Europe. Has happened to me many times.

    I once waited more than thirty minutes for a server at a table in a cafe in Harrods with three African American women, two of whom were serving colonels. I had to resort to loudly musing, to the embarrassmet of other tables who arrived after us and were served before, that I was going to get pizza delivered.

    My theory is that luxury products companies in Europe deliberately take a different marketing approach than US companies, or even the same EU companies operating in the US.

    In Europe there is a greater premium on exclusivity than there is in the US, and that is reflected in higher prices. Reason is, that EU markets are segmented by language and culture, in a way that the US is not. The economies of scale available in the US market are not as easily transferrable as might be wished to any five or ten EU markets with a similar population to the US, therefore the policy is to try to get more money from fewer people, rather than less money from more people, and consumers are encouraged to participate in this strategy. That rubs off on employees too.

    1. Tony - Thanks for the comments and logging in.

      It's an interesting perspective. I've experienced a different service attitude in restaurants in Europe but I've always attributed that to their comp structure and guessed there was a cultural component.

      Culture can get lost in translation for sure. Having just come back from New Zealand I discovered it was normal there to bring the check to the counter to pay when you're ready. They don't want to rush you.... quite civil in truth, but Americans can attribute that lack of attention to poor service since we seem to think rushing through a meal is more important.

      I have a hard time believing what I experienced at LV was what they shoot for with their guests, though I'm happy to be corrected. I've stayed in 4 Seasons hotels in Europe and received the same service level I would receive in the US. Granted it's the 4 Seasons and service is their calling card. But this was Louis Vuitton and as one of the dominant names in luxury I think they have to aspire to a better service level than apathy?

      Thanks again for an interesting perspective worth pondering. Perhaps someone else has a supporing or alternate perspective?

  2. Isn't that part of the exclusiveness of the company? They are supposed to make you feel uncomfortable, and out of place. It's a place for elitists only. Much like going to a high end white linen restaurant.

    Like the time I wandered into Firehouse in Sacramento just dressed in normal casual clothing I got treated like crap. The server actually asked me and my date if we would like to go somewhere else and try one of their other cheaper restaurants. I then decided to have the Halibut with a nice bottle of Hugel.

    Or the time I went to Opus One without an appointment. I pulled up in my '95 toyota tacoma, and parked next to all of the mercedes benzes and bmw's. They let me in to taste, but the woman at the bar said "please feel free to go up to the terrace" with a (yeah we don't want you in here feel).

    have you ever been to any of Loius Vuittons wineries? Chandon, Newton, Yquem? I've been in the caves of the two former tasting...still waiting to make it to D'Yquem.

    Although I'd assume they would treat a poor winemaker from the U.S. like crap unless your name is Thomas Jefferson.

    1. Thanks for the comments WS.

      I will disagree with the concept that a luxury retailer's goal is to make a customer uncomfortable. Exclusive yes but you want the consumer to identify with the brand and feel part of a community.

  3. All you have to do to get this kind of disenfranchisement is ask for a glass of sweet wine!

  4. My husband and I run a small winery in Ohio. I guess you can call us a "mom & pop" operation. We were slammed in an online review because we weren't snotty enough. So, you see, it can happen the opposite way. The guy said he'd tasted all over the world and ours was one of the top five worst experiences ever. He didn't say why, but when I read your article - I "got it". We try to make everyone feel welcome. But, some people are just never going to get happy. They pre-judge before they ever walk in the door.

    1. Stay true to who you are as a winery. You will attract the right consumers who want to have your experience. The person who complained about it not being their exerience would be the type who'd walk into a Walmart and complain about it not being Nordstrom. NEVER manage to the lowest common denominator or loudest complainer.

      On a side note, sadly Social Media has turned into a way for some to complain and work for discounts and accomodations. In this case LV contacted me and wanted to talk to me. I assured them I wasn't angling for anything and they thanked me and let me know they had passed on the information to their management. You can look on YELP and find serial complainers like that. They aren't worth appeasing but nevertheless your social reputation is important to track and maintain.

      In the LV case, if your business is involved in hospitality, no matter who you are or what you are selling, greeting a customer is a minimum job requirement.

  5. You experienced "selective demarketing."

    Also known as "Not My Kind of Customer." (So let them buy somewhere else . . .)


    Excerpts from a now out-of-print Harvard Business Review magazine
    (November-December 1971, Pages 74-80) article:

    “Demarketing, Yes, Demarketing”

    [Alternate link:]

    By Philip Kotler and Sidney J. Levy
    [Professors of Marketing, Northwestern University]

    In this article we will describe three different types of demarketing:

    1. General demarketing, which is required when a company wants to shrink the level of total demand.
    2. Selective demarketing, which is required when a company wants to discourage the demand coming from certain customer classes.
    3. Ostensible demarketing, which involves the appearance of trying to discourage demand as a device for actually increasing it.

    (A fourth type, unintentional demarketing, is also important but does not need to be considered here. So many abortive efforts to increase demand, resulting actually in driving customers away, have been reported in recent years that the dreary tale does not need to be told again.)


    Often an organization does not wish to contain or reduce the level of total demand but rather the demand coming from specific segments of the market. These segments or customer classes may be considered relatively unprofitable in themselves or undesirable in terms of their impact on other segments of demand. The company is not free to refuse sales outright, either as a matter of law or of public opinion. So it searches for other means to discourage demand from the unwanted customers. To illustrate:

    A luxury hotel catering to middle aged, conservative people has recently attracted rich hippies who come wearing long hair and odd clothes, and who sit on the lobby floor making a good deal of noise. This has turned off the hotel's main clientele, and the management must rapidly take steps to discourage further reservations by hippies.

    . . .

    The common problem faced by management in such cases is that the main clientele is threatened by the emergence of a new clientele. The organization does not find it possible to maintain both clienteles simultaneously. Gresham's Law seems to operate: the "cheaper" segment appears to drive the "dearer" segment from circulation. For one reason or another, the organization expects a higher risk and/or lower return (whether financial or psychological) from the new clientele. The alternative is to demarket selectively to the new clientele.

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    1. Because of a technical snafu, Part Two never posted.

      Let's try again . . .


      Excerpts from a now out-of-print Harvard Business Review magazine
      (November-December 1971, Pages 74-80) article:

      “Demarketing, Yes, Demarketing”

      [Alternate link:]

      By Philip Kotler and Sidney J. Levy
      [Professors of Marketing, Northwestern University]


      How is this [selective demarketing] done? When a company markets to one segment of the public, it may discourage other prospects who are unresponsive to, or alienated by, the appeals employed. For instance, advertising which plays up the joys of conventional home life demarkets the product to singles. In this sense, demarketing is the negative of marketing.

      Selective demarketing refers to (a) the deliberate choice of segments that are to be avoided and (b) the specific means chosen to ward off the undesired customers. Management decreases the benefit/cost ratio which the wanted segment receives from patronage.

      In examples like those cited, the marketer is typically not free to charge a discriminatory price to the undesirable segment. The demarketing mix has to be built out of other elements. Activities like these may be pursued:

      The company discourages hope for product availability. The hotel fears it will be out of rooms, . . .

      The company provides poor service to the undesirable segment. The undesirable customers receive poorer hotel rooms, slower service, insolent treatment--all suggesting that their business is not welcome.

      . . .

      To describe these steps is not to approve them. They are cited as familiar examples of what companies may do to discourage demand from certain classes of customers. The steps may raise thorny issues in social ethics. On the one hand, it seems understandable that an organization should have the right to choose or protect its major clientele, especially if its long run profits are at stake. On the other hand, it is unjust to discriminate against buyers who have long hair, black skin, lower status, or small orders. The injustice seems especially intolerable if the discriminated buyers are left without equivalent alternatives. In that case demarketing becomes entwined with the social, legal, and political problems relating to unacceptable forms of discriminatory demarketing.

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  8. Rob, I recall an experience shopping with my girlfriend (she was shopping, I was sitting on the same couch as you) at a Gucci store in Bologna. There is one area in Bologna with all the high-end retailers.

    The moment we walked in, we were greeted warmly and was appoached by a young man from Shanghai (we asked him where he was from) who spoke perfect English. He also spoke perfect Italian and I would assume Mandarin. He put his gloves on (so as not to soil the bags) and went to work showing bag after bag.

    We were dressed in our normal European wear for winter, defined as MUST HAVE SCARF over layers of clothing and probably some sort of head adornment, but never a baseball cap. I was offered espresso while I waited and was treated with the utmost courtesy. We were not dressed as high-end customers, we were both wearing jeans as a matter of fact, but not sneakers.

    If anything, this experience speaks to the smarts of Gucci and their parent company for hiring a diverse sales staff. Russian was also being spoken in the room during my time there. Gucci is a global luxury brand much like LV. Bologna and Rome are international destinations and the expectation of a globally diverse sales staff almost seems obvious.

    I wonder how many languages are spoken at Opus One, Harlan, or any number of tasting rooms throughout Napa/Sonoma? Napa is a global destination same as Rome.

    Silicon Valley should teach us that we can wear a hoodie, flip flops, and a baseball cap and be worth $100 million (I learned that during the bubble times, when The Fifth Floor Restaurant in SF had plenty of flip flops and cargo shorts in the main dining room ordering 1st Growth Bordeaux, ahh the old days)

    1. Thanks David.

      I suppose from the personal branding angle, we would have made ourselves more likely to be served had we dressed a little better. I was in jeans, a button down short sleeve shirt and shoes - probably not athletic shoes since I was in a buttoned shirt, but I don't recall now. We were wrinkled though and my shirt wasnt designer.

      The other point on Napa is an interesting one but you have to also consider while an international destination, the wines aren't in wide international distribution. Only about 3% of US wines are exported, so the customers are US and mostly Bay Area people (That's a stat on wine clubs I'll pull out this year.)

      Probably 99% of the visitors are English or Spanish speaking and while I've never tested it, I suspect there are Spanish speaking folks at the tourist wineries.

    2. On the subject of export wines . . .

      From Wines & Vines
      (January 27, 2017):

      "The Reality of Overseas Wine Sales;
      Domestic sales often easier and more valuable than exports due to prohibitive taxes and tariffs"


      By Paul Franson

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